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Is Travel Dead? New Research Shows Green Shoots Appearing

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Is Travel Dead? New Research Shows Green Shoots Appearing

In most of the world, the travel industry has been one of the worst-hit during the coronavirus pandemic. The airlines have faced a never-ending battle to survive from closed borders and passengers’ fears of catching the virus to travel shaming for those who dare to fly. However, tourism is crucial to the world’s economy. The World Travel and Tourism Council’s 2019 economic report showed that travel and tourism accounted for US$8.9 Trillion, which is 10.3% of the world’s GDP. Around 1 in 10 jobs are related to travel and tourism.

A new report commissioned by Skyscanner, the online travel search site, has looked at the travel situation throughout the pandemic. Initially, there was a great demand for one way travel. This was driven by those trying to get back to their home country. Sometimes passengers had originally booked a return flight only to be abandoned by their airline. Others had been working or living abroad but wanted to return to their home country. The demand for one-way flights has abated slightly, although it remains higher than average. This is mainly driven by travelers from Australia, South Korea, and Italy.

There has also been a demand for one-way flights for UK-based travelers as the UK government announced last-minute changes to the countries on its travel corridor list, allowing travelers to return home without quarantine. Many of those that had flights booked to arrive back after the self-isolation would come into force were charged hundreds of pounds to buy new flights to beat the deadline.

The picture is very different globally. Although Europe opened borders relatively early compared to Asia, there has been a limited recovery as countries took different approaches to travel. Countries such as Portugal, Italy, and Greece suffered the loss of consumer confidence, no doubt, particularly from the substantial UK market as the government’s travel corridor list flip-flopped between safe destinations from one week to the next. In Asia, domestic tourism has recovered well, with China showing a rapid recovery of the domestic market earlier in the year after their strong response to COVID-19.

Flightseeing has also become a new option in countries whose borders are closed. Flights to nowhere are selling out within minutes for travel starved customers. However, restrictions on long haul travel remain for most countries. Key markets such as the transatlantic routes remain closed for the majority of customers. Despite efforts from industry leaders to reopen routes such as London – New York, which is the most profitable in the world, governments on both sites of the Atlantic are refusing to budge.

Airlines and tourism are focussing on domestic and short-haul travel, especially for leisure travelers. IATA, the international airline body, now predicts that it will be 2024 before air travel returns to pre COVID-19 levels.

Skyscanner’s recent survey showed that trips planned for vacation travel are growing steadily into 2021, along with flights to see friends and family to a lesser extent. Business and event travel is expected to continue to be flat for the same period. A recent study by FCM, the global travel management company, showed that over 90% of businesses planned to travel domestically and on short-haul international flights, within three months of borders opening or and lifting restrictions such as quarantine. However, most said that the amount of travel would be much less than in previous years.

For the average traveler, deciding if, when, and where to travel has become far more complex. Before, time and money were often the simple deciding factors used. Now the most important factors are the individual’s appetite for risk, both in terms of safety and financial risk. The most critical factor in deciding to travel in Skyscanner’s survey was not safety, but flexible booking options. Having been burned earlier in the crisis, consumers are reluctant to book anything that they can’t change or get some form of refund if the situation changes. Not surprisingly, the next most important factors were the cleaning and health procedures used during travel.

For airlines, low-cost airlines are likely to be those that can survive and adapt. Many low-cost airlines are much more agile than their legacy carrier competitors and understand the pricing models needed to stimulate demand and maintain a profit. Given that they are usually domestic and short-haul focused with a high leisure traveler base, the current situation is better suited to them than those relying on long haul travel and premium passengers.

Ultimately unless governments make safe travel possible again or provide support to the travel industry, we are likely to see many more casualties within the industry. At least the latest surveys show there is still demand travel in some travel industry sectors, which will give airlines some hope.

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